Competitive Strategy Analysis

This document provides an analysis of different strategy models including Porter's Generic Strategies, PESTEL Framework, Porter's Five Force Framework, and SWOT Framework. It discusses the applications of these models in various industries and provides examples of companies that have successfully implemented these strategies. The document also highlights the importance of these models in achieving competitive advantage in the market.

Running head: COMPETITIVE STRATEGY ANALYSIS
COMPETITIVE STRATEGY ANALYSIS
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Strategy Model 1
Porter’s Generic Strategies
According to Grant (2016), Porter’s Generic strategies are the strategies that helps in
describing the various different ways by means of which a firm can able to achieve the
development of its competitive edge over the other within its industry. It is to note that there
are a total of three types of generic strategies and they are- differentiation strategy, cost
leadership strategy and focus strategy. Firms can easily implement one or more of these
strategies at the place for conducting their business operations in the competitive market.
Application
One of the best example of companies that make use of Porter’s generic strategies is
Walmart. The company is using the cost leadership strategy. This strategy is basically used
for attaining a low costs products and giving the customers more within a set product price.
This process of low cost product production is regarded as important for influencing the ways
in which the company conducts its business operations (Barney 2015). The worldwide
notable growth of Walmart is on the basis of the revenues attained by the companies by
means of proper sales of the products and services. It increases its products sale with the help
of low pricing compared to its present rivals in the market. Implementation of this strategy is
regarded as effective for Walmart in achieving its desired goals and objectives in terms of
increasing the revenues of the company (Bertozzi, Ali and Gui 2017).
Strategy Model 2
PESTEL Framework
The PESTEL framework is used by the businesses to analyse the external factors that
influence the operations of the businesses. It stands for Political factors, Economic factors,

2COMPETITIVE STRATEGY ANALYSIS
Social factors, Technological factors, Legal factors and Environmental factors. According to
Aithal (2017), the external environment is also called the macro environment and the macro
environment of contemporary businesses could be analysed in detailed way by the help of
implementing the PESTEL framework. It is also very effective for the companies that plan
for international expansions.
Application
Near about all the big companies make use of PESTEL analysis. One of the best to
consider is of Woolworths Pvt. Ltd., a multinational retail company. The company use this
model for gaining an idea of the various external factors that can influence its business
strategies (Kim, Rim and Lee 2019). For example,
Political- Policy makers and the other different nonn-government organisations are
the major stakeholders of Woolworths. The government legislation influence the product
prices and services.
Economic- The rate of inflation and that of exchanges influence the policies and legal
regulations developed by Woolworths.
Social- Change in demographics and the gender role along with customers varied
expectations influence the product portfolio of Woolworths.
Technological- The Company is influenced by the various different technological
disruptions taking place within the industry.
Legal- Intellectual Property Rights, for example, influence the company negatively if
it fails to develop the protective policies.

3COMPETITIVE STRATEGY ANALYSIS
Environmental- According to Reis and Higham (2017), the Australian government
has recently signed Paris Climate Agreement and Woolworths is expected to adhere with the
policies.
Strategy Model 3
Porter’s Five Force Framework
According to O’Hara et al. (2017), this framework is a tool for assessing the level of
competitiveness within a particular industry. It is to note that the attractiveness of the industry
basically include the five different forces which influence a particular company including-
bargaining power of the suppliers, threats of the new entrants, threats of the substitutes,
bargaining power of the buyers and industry rivalry.
Application
The chosen company for this purpose is McDonalds, a multinational fast food
company. McDonalds can gain a clear image of the level of attractiveness within its food and
retail industry along with the help of this Porter’s Five Force Framework. The levels of
attractiveness of the industry would be depicted clearly to the company along with the help of
properly implementing the framework within the business.
Bargaining power of the suppliers- Suppliers influence the ways in which the product
based concept of the company is developed. The presence of several suppliers within the fast
food restaurant market influence McDonlads and its power in the market.
Threats of the new entrants- Entry of the new fast food chains within the fast food
industry is not that easy in order to require the potential capital. The brand developed based
costs within the industry is also very high.

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Threats of the substitutes- The presence of threats related to the substitute products
within the fast food industry is also very high because of the presence of large numbers of
options for the customers (Cao and Kim 2015).
Bargaining power of the buyers- Buyers within the fast food industry are very
powerful in terms of nature. With the same, the switching costs within the industry is also
considered to be very low because of the presence of large numbers of potential restaurants.
Industry rivalry- The Company is facing very tough competition because of the
saturated fast food based market. There are many competitors of McDonalds present in the
market and at the same time, there is a presence of huge numbers of companies that provide
aggressive competition to McDonalds. Some of the examples are the burger King and
Subway.
Strategy Model 4
SWOT Framework
According to Gurel and Tat (2017), SWOT analysis is a strategic planning that is
based on the techniques that can be used for providing a support to the organisation for
identifying the Strengths, Weaknesses (Internal), Opportunities and Threats (External).
Application
One of the best example to consider in this context is that of Apple, a leading
multinational technology company. It can use this framework for assessing its internal
strengths and weaknesses so that it can work on them and finding out the external
environment that can impact on the strategies implemented. Below is presented a SWOT
analysis of Apple

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Strengths- Apple is widely known for its advanced technology products. It has a very
strong image and have rapidly improved its product innovation level.
Weaknesses- Apples does not have a strong distribution network (Chen, Hu and
Smith 2018). The selling prices of the company is also very high and therefore, its product
sales is highly dependent on the high end customers whose income level is high.
Opportunities- It can expand its distribution networks so that it can improve its sales
and operations in many different parts of the world. It can also develop its product portfolio
for increasing the customer base.
Threats- The high level of aggressive competition within the industry can be
considered as a major threats for the product sales of the company.

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References:
Aithal, P.S., 2017. A critical study on Various Frameworks used to analyse International
Business and its Environment. International Journal of Applied Engineering and Management
Letters (IJAEML), 1(2), pp.78-97.
Barney, J., 2015. 15 Firm resources and sustained competitive advantage. International
Business Strategy: Theory and Practice, p.283.
Cao, Y. and Kim, K., 2015. How do customers perceive service quality in differently
structured fast food restaurants?. Journal of Hospitality Marketing & Management, 24(1),
pp.99-117.
Chen, H., Hu, Y.J. and Smith, M.D., 2018. The impact of E-book distribution on print sales:
analysis of a natural experiment. Management Science, 65(1), pp.19-31.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley &
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Gürel, E. and Tat, M., 2017. SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of
International Social Research, 10(51).
Kim, Y.S., Rim, H.C. and Lee, D.G., 2019. Business environmental analysis for textual data
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O'Hara, N.N., Nophale, L.E., O'Hara, L.M., Marra, C.A. and Spiegel, J.M., 2017.
Tuberculosis testing for healthcare workers in South Africa: A health service analysis using

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Porter's Five Forces Framework. International Journal of Healthcare Management, 10(1),
pp.49-56.
Reis, A.C. and Higham, J.E., 2017. Climate change perceptions among Australian non-
frequent flyers. Tourism Recreation Research, 42(1), pp.59-71.